How Long Will an Accident Affect My Insurance Premuims?

How Much Accidents Affect Premiums

If your insurance company is going to increase your auto insurance premium, it will happen the next time your policy is due to be renewed. At that point, you can expect the rate to go up between 20 to 40 percent, which is the surcharge amount recommended by the Insurance Services Office. This is the average percentage increase before discounts and adjustments plus any claims-processing fee. For instance, if you have multiple cars that are insured and other insurance policies with the company, your increase will probably be at the low end of the scale, while a single insured car with the company will probably see an increase at the high end of the range, according to Insure.com.

How Long Will It Last

Higher premiums due to accidents will last at least three years. Many states have set this as the maximum length of time, according to Insurance Quotes US.com. Even if you try to shop around for a better rate, insurance companies can generally check your record back three to five years. If the company sees an accident on your record, you will be charged a higher rate until the accident no longer appears on your driving record.

Freebie

Some insurance companies will give their customers a pass on their first at-fault accident. This means that you won’t see an increase in your premium. It’s called “accident forgiveness,” and it will help the insurance company hold onto that customer at least until the accident is off the driving record. That’s because many other insurance companies will charge the higher premium to the customer because of the accident. The companies that offer accident forgiveness generally have conditions that the driver must meet to be eligible, such as length of time with the company and length of time accident free.

After an Accident

If you can’t stop the accident, at least you can minimize that damage it will cause to your finances for the next three to five years. You can search for a company that will charge you a lower premium, though lower is relative. It won’t be as low as if would have been before your accident, but it still may be lower than your current insurance company is charging you because the new insurance company doesn't raise rates after an accident as much as your current company. It may be easier to simply increase the deductibles for your car insurance to lower your premiums or consider only carrying liability coverage.